Zscaler Layoffs Impacting 3% of Workforce in Streamlining Effort

Cloud security company Zscaler has confirmed layoffs impacting 3% of its global workforce. That’s approximately 150 employees.

Zscaler announced the layoffs in a filing with the U.S. Securities and Exchange Commission (SEC). The cuts are part of Zscaler’s “planned efforts to streamline operations and to align people, roles and projects to the company’s strategic priorities.”

The company expects to complete the layoffs by the end of July. The company’s workforce is nearly 5,000 employees.

Zscaler joins the more than 20 companies doing business in the channel that have cut workers since the start of the year.

Layoffs Following Latest Zscaler Quarterly Earnings

For its second quarter, Zscaler this week reported $387.6 million in revenue, a 52% year-over-year increase. It also reported a $57.6 million net loss for the quarter. That’s compared to a more than $100 million net loss for the year-ago quarter.

For its full fiscal 2023, Zscaler expects its revenue to be roughly $1.56 billion.

Jay Chaudhry is Zscaler‘s chairman and CEO.

Zscaler’s Jay Chaudhry

“We exceeded both our revenue and profitability guidance in Q2, demonstrating the operating leverage inherent in our business model,” he said. “Even in this difficult macroeconomic environment, we continue to see customers consolidate multiple point products onto our integrated zero-trust security platform for better security and lower cost. We believe that strong customer interest in our platform, together with the growth in our annual recurring revenue base, supports the increase to our fiscal year guidance.”

Zscaler expects to pay out $8 million-$10 million in severance and benefit costs to the employees losing their jobs.

Last month, Zscaler announced it is acquiring Canonic Security, an Israel-based SaaS application security platform provider. It aims to prevent organizations’ growing risks of SaaS supply chain attacks. By integrating the new supply chain security capabilities into its data protection services, Zscaler strengthens its cloud access security broker (CASB) and SaaS security posture management (SSPM) offerings.